Economic Outline

Economic Indicators

Tunisia was deeply impacted by the Jasmine Revolution of 2011 that ousted President Zine El Abidine Ben Ali, and the country has never recovered economically ever since. The situation was exacerbated by the health crisis triggered by the COVID-19 pandemic and by the political crises that the country has been experiencing in recent years. After a moderate rebound in 2021 (4.3%) and in 2022 (2.7%), the economy stalled in 2023 (0% growth) and gained momentum in 2024 (+1.4% on an annual basis), although at a slower pace than that expected by the Central Bank. The country’s economic outlook remains muted in the short and medium term. Real GDP growth is forecast at 1.6% for 2025, while medium-term growth is expected to stay sluggish, averaging below 1.5% of GDP (IMF).

Despite lower commodity prices and reduced subsidy costs, public finances remained strained in 2024 amid stalled expenditure reforms and weak growth. The fiscal deficit fell to an estimated 6% of GDP in 2024 (from 6.7% in 2023) as subsidies and wages were contained, while tax revenues rose moderately. Public debt climbed to 83.7% of GDP in 2024 (from 67.8% in 2019), with gross financing needs rising to 16.1% of GDP, mainly due to external debt service. Limited access to international markets pushed authorities to rely more on domestic financing, as FDI—despite a 26.7% increase in early 2024—covered less than a quarter of external obligations. The budget remains rigid and exposed to external shocks. Fitch Ratings estimate payroll, interest, and subsidies will consume 87% of total revenue (excluding grants) in 2026, down from 95% in 2024. Subsidy costs remain sensitive to global price fluctuations. Tunisia’s inflation slowed to 7% in 2024, down from 9.3% in 2023, according to the National Institute of Statistics. The easing was driven by reduced pressure on food prices, though they still rose by 7.2% during the year. Manufactured goods prices rose 6.1%, driven by clothing and footwear (+9.7%) and cleaning products (+7.8%). Services inflation reached 5.4%, led by restaurants, cafes, and hotels at 11.7%. The IMF forecasts inflation to remain sticky over the forecast horizon, at 6.7%. Among the policies necessary to restore macroeconomic stability the IMF points to a conscientious reduction of the fiscal deficit through equitable taxation reform, strict control over the public sector wage bill, better-targeted subsidies, and deep reforms of state-owned enterprises.

Tunisia is afflicted by increasing economic disparities that favour its coastal regions, which account for more than 80% of urban areas and 90% of overall employment. The highest poverty rates are concentrated in rural areas, especially those in the northwest and southwest of the country (often exceeding 33%). Contrarily, the greater Tunis area shows the lowest values (Carnegie). Poverty at the Upper-Middle Income Poverty Line (USD 6.85/day in 2017 PPP) fell to 15.7% in 2024 (from 15.9% in 2023) and is projected to drop to 14.9% by 2026, according to the World Bank. According to the latest figures from the National Statistics Institute (INS), as of Q3/2024, the unemployment rate stood at 16%; nevertheless, youth unemployment – at 40.5% - was particularly high. By gender, the unemployment rate remains significantly higher for women (22.1%) than for men (13.3%).

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